nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2016‒07‒02
five papers chosen by
Edoardo Marcucci
Università degli studi Roma Tre

  1. Using geographically weighted choice models to account for spatial heterogeneity of preferences By Wiktor Budziński; Danny Campbell; Mikołaj Czajkowski; Urška Demšar; Nick Hanley
  2. The dynamics of solo self-employment: Persistence and transition to employership By Lechmann, Daniel S. J.; Wunder, Christoph
  4. The Perception of People Regarding Selection of Petrol Pump in Karachi By Alvi, Mohsin; Ikram, Midra; Mirza, Mohammad Haris; Khan, M. Mubashir Q.
  5. Examining Irish farmers’ awareness of climate change and the factors affecting the adoption of an advisory tool for the reduction of GHG emissions By Tzemi, Domna; Breen, James P.

  1. By: Wiktor Budziński (Faculty of Economic Sciences, University of Warsaw); Danny Campbell (University of Stirling, Stirling Management School); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Urška Demšar (University of St Andrews, School of Geography and Geosciences); Nick Hanley (University of St Andrews, School of Geography and Geosciences)
    Abstract: In this paper we investigate the prospects of using geographically weighted choice models for modelling of spatially clustered preferences. The data used in this study comes from a discrete choice experiment survey regarding public preferences for the implementation of a new country-wide forest management and protection program in Poland. We combine it with high-resolution geographical information system data related to local forest characteristics. Using locally estimated discrete choice models we obtain location-specific estimates of willingness to pay (WTP). Variation in these estimates is explained by the socio-demographic characteristics of respondents and characteristics of the forests in their place of residence. The results are compared with those obtained from a more typical, two stage procedure which uses Bayesian posterior means of the mixed logit model random parameters to calculate individual-specific estimates of WTP. The latter approach, although easier to implement and more common in the literature, does not explicitly assume any spatial relationship between individuals. In contrast, the geographically weighted approach differs in this aspect and can provide additional insight on spatial patterns of individuals’ preferences. Our study shows that although the geographically weighted discrete choice models have some advantages, it is not without drawbacks, such as the difficulty and subjectivity in choosing an appropriate bandwidth. We find a number of notable differences in WTP estimates and their spatial distributions. At the current level of development of the two techniques, we find mixed evidence on which approach gives the better results.
    Keywords: discrete choice experiment, contingent valuation, willingness to pay, spatial heterogeneity of preferences, forest management, passive protection, litter, tourist infrastructure, mixed logit, geographically weighted model, weighted maximum likelihood, local maximum likelihood
    JEL: Q23 Q28 I38 Q51 Q57 Q58
    Date: 2016
  2. By: Lechmann, Daniel S. J.; Wunder, Christoph
    Abstract: This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo self-employment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.
    Abstract: Diese Studie untersucht die Dynamik der Solo-Selbständigkeit (Verbleib,Zu- und Abgänge). Wir berechnen das Ausmaß genuiner Zustandsabhängigkeit für den Verbleib in Solo-Selbständigkeit und schätzen den kausalen Effekt der Solo-Selbstständigkeit auf die Wahrscheinlichkeit, Arbeitgeber zu werden. Die Berechungen basieren auf dynamischen multinomialen Logit-Modellen, die mit Daten des Sozio-oekonomischen Panels geschätzt wurden. Unsere Ergebnisse deuten auf eine nur geringe genuine Zustandsabhängigkeit hin: Sowohl die beobachtete Persistenz in Solo-Selbständigkeit als auch die Übergänge zum Arbeitgeber-Status lassen sich größtenteils durch (beobachtete und unbeobachtete) individuelle Merkmale erklären.
    Keywords: state dependence,dynamic multinomial logit,solo self-employment,own-account worker,stepping stone
    JEL: J23 J62
    Date: 2016
  3. By: Maria Gerhardt; Rudi Vander Vennet (-)
    Abstract: During the financial crisis, European governments implemented emergency rescue packages to support struggling banks. No less than 114 European banks benefited from goverment support in the period 2007 to 2013. We investigate the financial condition of banks before and after receiving state support by running logit regressions. Our results indicate that the equity ratio is the decisive indicator to predict distress. Bank-specific variables, such as loan provision, nonperforming loans and bank size also perform well in detecting bank bailouts. Surprisingly, the aided banks hardly improve their performance indicators after they have been rescued but maintain similar risk profiles/business models.
    Keywords: Bank bailout, state aid, financial crisis, logit analysis
    JEL: G21 G28
    Date: 2016–05
  4. By: Alvi, Mohsin; Ikram, Midra; Mirza, Mohammad Haris; Khan, M. Mubashir Q.
    Abstract: The objective of the study is to get an idea about people’s perception on the choice of petrol pumps in Karachi. To accomplish the purpose, it was hypothesized that (1) Location has a significant impact on the choice of Petrol Service Stations (2) Quality has a significant impact on the choice of Petrol Service Stations (3) Rewards has a significant impact on the choice of Petrol Service Stations. A sample of 200 respondents was randomly selected who filled a self reporting questionnaire. One sample t-test was applied on gathered data to assess the observations. It was revealed that neither quality nor location and reward have an influence on the consumer choice over selection of petrol pump.
    Keywords: Consumer Choice, fuel refilling station, Karachi, One Sample T-test
    JEL: D2 D3 D4 M1 M2 M3
    Date: 2016–01–29
  5. By: Tzemi, Domna; Breen, James P.
    Abstract: Livestock is a very significant sector in Irish agriculture and it could possibly mitigate a large amount of greenhouse gas emissions. However, farmers’ awareness and acceptance towards climate change might be a significant barrier to voluntary adoption of best practice techniques. This paper presents results from a supplementary survey of 747 Irish farmers conducted as part of the National Farm Survey (NFS) in 2014, with a view to understanding farmers’ awareness of and attitudes to climate change and greenhouse gas (GHG) emissions. Survey results showed that there was a general uncertainty towards a number of agricultural GHG emissions related questions and that farmers’ attitude towards GHG emissions reduction was not very positive. In order to explore further farmers’ attitudes towards climate change, a multinomial logit model was used to examine the socio-economic factors that affect farmers’ willingness to adopt an advisory tool that would show the potential reduction in GHG emissions from the adoption of new technologies. Results showed that investment in machinery, awareness, region, environmental subsidies, use of social networking, agri-training encouraged adoption while off-farm income was negatively related to adoption.
    Keywords: climate change, adoption, awareness, multinomial logit, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy, Agricultural and Natural Resource Economics, Environmental and Ecological Economics, P32,
    Date: 2016–04

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